U.S. stock markets tumbled on Monday as investors continued to digest first-quarter earnings from some of the world’s biggest companies and watch for impending updates from Microsoft and Google’s parent company Alphabet, among others.
Wall Street’s benchmark S&P 500 closed up 0.1% while the tech-heavy Nasdaq Composite ended down 0.3%.
Morgan Stanley’s U.S. equity team noted that stocks were generally doing well at the start of the current earnings season, putting them at risk if investors began to focus on the increasingly cautious outlook for stocks. leaders.
“For our more tactical clients, we believe this dynamic poses a near-term risk to stock prices given our more pessimistic earnings outlook this year, especially as the liquidity picture becomes less dovish.” , they wrote in a note to clients.
Shares of Coca-Cola fell 0.2% after the beverage group reported net revenue growth of 5% in the first quarter.
The latest results from Microsoft, Alphabet and Amazon this week should attract investors’ attention. Big tech held up well even as US interest rates continued to climb – a factor that supported the broader market. Microsoft is up 18% year-to-date, while Amazon has gained 29%. The S&P 500 has added just over 7% so far.
Bed Bath & Beyond fell 39% to 18 cents per share after the home goods group filed for Chapter 11 bankruptcy protection on Sunday.
U.S. government debt edged higher on Monday, pushing yields on interest-rate-sensitive two-year securities treasures down 0.04 percentage point to 4.14% and the yield on the benchmark 10-year note down 0.06 percentage point to 3.51%.
BMO strategists noted that volumes were just over half of recent averages. Movements are expected to remain subdued ahead of Thursday’s first-quarter gross domestic product numbers and closely watched inflation data on Friday.
The Federal Reserve is meeting next week to decide interest rate. Although a quarter-point hike is widely priced in, investors are looking beyond that to the potential for rate cuts later in the year.
An index measuring the strength of the dollar against a basket of six major currencies fell 0.3%.
China-related exchanges started the week on a high, with Hong Kong’s Hang Seng index down 0.6% and the Hang Seng Tech index shedding 0.2%, although it traded up to 1.1% earlier in the session.
A Bloomberg report last week suggested that US President Joe Biden was set to further restrict the ability of US companies to invest in critical parts of China’s economy – a move that would once again raise concerns about the effect of persistent geopolitical tensions between the two countries.
China’s CSI 300 fell 1.2%, dragged down by basic materials, real estate and consumer staples.
The regional Stoxx 600 in Europe and the FTSE 100 in London both fell less than 0.1%. The moves came when Credit Suisse announced it suffered 61.2 billion Swiss francs ($68.6 billion) in asset outflows in the first trimester. Shares of UBS, which agreed to take over Credit Suisse last month, rose 0.8%.
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